The Ministry of Agriculture and Land Affairs has taken out an advertisement in Business Day denying five Bank board members were fired because of irresponsible lending to their friends and misappropriation of up to R1 billion. This follows a report by the SABC that chairperson Lungile Mazwai and directors Litha Nyhonyha, Charles Davies, Raisibe Morathi and Moira Tlhagale were fired.
“All of these [statements] are blatantly incorrect,” says Godfrey Mdhluli, spokesperson for land and agriculture minister Lulama Xingwana. Mdhluli points out none of the board members listed in the SABC report had been implicated in the forensic audit. Some had offered to resign and others were asked to step down as part of a Cabinet recommendation to restructure the Land Bank board and review executive and non-executive appointments. It is not clear why board members not fingered by the audit, including Mazwai, were asked to step down.
The ministry also refuted reports that the bank’s head of Treasury, Makgale Gwangwa, had been implicated in the audit and suspended from duty. “The same applies to Ms Kumenderi Pillay, senior finance manager, who recently resigned.” H owever, there was “reasonable belief” that transactions worth over R900 million, authorised by management without board or ministry approval, included “some level of misappropriation of funds by management”. The ministry has not confirmed which senior managers implicated would face criminal charges, but they are believed to include former CEO Alan Mukoki, who has strenuously denied wrongdoing, claiming all loan decisions followed due process. He says loans for golf estates offered higher returns, and would have enabled the bank to fund its development mandate. Loans under suspicion include over R300 million to Amber Mountain Investments for equestrian estate Seaton Delaval on the KZN North Coast, a R7,5 million loan to Nulane for land to develop a golf estate near Midrand, Gauteng, and loans totalling R770 million to Ushukela Milling, owned by Patrick Sokhela, part of which was used to buy his AmaZulu soccer team PSL status.
Amber Mountain director Abe Maduna is reportedly a close associate of Mukoki’s. Registrar of Companies records show he is also a director of Nulane, together with the of the Development Bank of Southern Africa, Paul Baloyi, also reportedly an associate of Mukoki’s. Farmer’s Weekly is investigating claims that senior executives were bribed to approve loans and issue fraudulent guarantees, and that undeclared interests were held through third parties in companies benefiting from Bank loans. – Stephan Hofstätter
